National Bank of Kenya Limited v Waweru [2023] KEHC 25121 (KLR)

National Bank of Kenya Limited v Waweru (Civil Appeal E026 of 2022) [2023] KEHC 25121 (KLR) (10 November 2023) (Judgment)

Neutral citation: [2023] KEHC 25121 (KLR)

Republic of Kenya

In the High Court at Busia

Civil Appeal E026 of 2022

WM Musyoka, J

November 10, 2023

Between

National Bank Of Kenya Limited

Appellant

and

Mary Waithera Waweru

Respondent

(An appeal arising from judgment of Hon. Mrs. Lucy Ambasi, Chief Magistrate, CM, in Busia CMCCC No. 204 of 2016, delivered on 31st August 2021)

Judgment

1. The suit, at the primary court, was by the respondent, against the appellant, and it sought that a permanent injunction issue with respect to Bukhayo/Mundika/3949, and an order be made to direct the appellant to agree with the respondent, on the reasonable amount that the appellant was entitled to. I have not come across a copy of statement of defence, in either the original trial court records or the record of appeal. Nevertheless, a trial was conducted, and judgment was delivered on 31st August 2021, granting the injunction sought, and entering a judgment on admission.

2. It was the said judgment which provoked the filing of the instant appeal. The memorandum of appeal is dated 5th July 2022, and was filed herein on 7th July 2022. The grounds are that the judgment was entered in the absence of evidence; orders were granted that had not been sought in the plaint; there was misapprehension and misapplication of the in duplum rule in section 44 of the Banking Act, 2007; the respondent lacked locus standi to file the suit; and the conditions for grant of an injunction were not met.

3. Directions were taken on 25th September 2023, for disposal of the appeal by written submissions. Both sides have filed their respective written submissions.

4. The appellant cites sections 80(2) and 82(2) of the Law of Succession Act, Cap 160, Laws of Kenya, and Isaya Masira Momanyi vs. Daniel Omwoyo & another [2017] eKLR (JM Mutungi, J), to make the point that there was no locus standi to sue, as no proof was provided that the respondent had a grant of representation as at the time she filed the suit. It is submitted that the parties are bound by their pleadings, and the respondent had not asked the court to decide on the amount that the appellant was to be paid, and Galaxy Paints Company Limited vs. Falcon Guards Limited [2000] eKLR (Gicheru, Shah & Bosire, JJA), Benjamin Gathiru Mwangi vs. John Ndirangu Kariuki [2017] eKLR (Wakiaga, J) and Conrad Masinde Nyukuri & another vs. Robson Harris & Another [2021] eKLR (Nyakundi, J) are cited on that behalf. Giella vs. Cassman Brown & Co. Ltd [1973] EA 358 (Spry, VP), Kitur vs. Standard Chartered Bank & 2 others [2002] eKLR (Tunya, J) and Tanad Transporters Ltd vs. Kenya Shell Ltd [2008] eKLR (Mwilu, J) are cited to support the argument that the conditions for grant of injunctive relief had not been met.

5. On his part, the respondent largely agrees with the impugned judgment. On locus standi, the respondent submits that the trial court had been gracious enough to allow the appellant proceed with the matter, despite not filing a defence. On lack of a grant of representation on her part, it is submitted that the respondent had confirmed to the trial court that she had done succession to the estates of her parents, and the trial court was satisfied with that, and that, by dint of sections 107, 109 and 112 of the Evidence Act, Cap 80, Laws of Kenya, the burden of proof lay with the person making the allegation. It is submitted that the respondent resided on the land, and there was no limitation, to her protecting her right to the land as such. It is argued that Article 22 of theConstitution of Kenya allows every person to file a suit in court. Lee G. Muthoga vs. Habib Bank Zurich Finance (K) Limited & another [2016] eKLR (Githinji, Visram & GBM Kariuki, JJA), Mwambeja Ranching Company Limited & another vs. Kenya National Credit Corporation [2019] eKLR (Koome, Warsame & Kiage, JJA), Kenya Hotels Ltd vs. Oriental Commercial Bank Ltd (formerly known as The Delphis Bank Limited [2019] eKLR (Ouko P, Gatembu & Kantai, JJA), and Mugure & 2 others vs. Higher Education Loans Board [2022] KEHC 11951 (KLR)(Mabeya, J), to support the submission that the in duplum rule was properly invoked. Dr. Simon Waiharo Chege vs. Paramount Bank of Kenya Ltd Nairobi (Milimani) HCCC No. 360 of 2001 (Ringera, J), Malier Unissa Karim vs. Edward Oluoch Odumbe [2015] eKLR (Aburili, J), Kenya Power & Lighting Co. Limited vs. Sheriff Molana Habib [2018] eKLR (W. Korir, J), Jacob Ambala Odondi vs. Violet Shikuku [2021] eKLR (Omollo, J) and Bandari Investments & Co. Ltd vs. Martin Chiponda & 139 others [2022] eKLR (Naikuni, J) are cited for the submission that the trial court properly applied the principles governing grant of permanent injunctions.

6. The principal argument, in my view, is that the suit was incompetent, for lack of locus standi on the part of the respondent, for not having taken out letters of administration with respect to the estates of her late parents. The respondent has not contested the lack of letters of administration, save to say the duty was on the appellant to proof that she had no such documents, and that even without them she could still sue, on account of Article 22 of the Constitution.

7. It is pleaded, at paragraph 3 of the plaint, that the respondent was the legal administratrix of the estate her father and mother, and that the subject property, Bukhayo/Mundika/3949, was registered in the name of her father, Paul Waweru Karanja, deceased. The money-lending contract, which formed the basis for the suit, was entered into between the late father of the respondent and the appellant, and that the said late father of the respondent passed away before the subject loan had been settled. Her case is that the appellant had moved in to enforce the contract, hence the suit. She sought a permanent injunction to restrain the sale of her father’s property, Bukhayo/Mundika/3949, and an order that the bank enters into an arrangement with her on payment of a reasonable amount.

8. The pertinent averments in her plaint state as follows:“1. …

2. …

3. The plaintiff is the legal administrator of the estate of Paul Waweru Karanja and Mary Waithera Karanja both deceased and daughter of the deceased persons.

4. At all material times relevant to this suit all that parcel of land known as Bukhayo/Mundika/3949 is registered into the name of Paul Waweru Karanja (deceased).

5. The plaintiff aver that the defendant Bank and the late father entered into an agreement whereof the late Paul Karanja was advanced a sum of Kshs. 200,000. 00 on a legal charge in favour of the defendant bank in 1991.

6. …

7. …

8. The plaintiff claim is that there be issued an order of injunction to stop the intended sale of his father property and she be given time to negotiate and repay reasonable entitlement to the bank.

10. …

11. …

12. …

Reasons Wherefore:- the plaintiff prays that judgement be and is hereby entered against the bank for:-a.An order for permanent injunction to issue against the defendant from selling by Public Auction or any other means land parcel No. Bukhayo/Mundika/3949 registered in the plaintiff deceased fathers name.b.An order that the plaintiff and the defendant do enter into an agreement on settlement of reasonable amount the bank is entitled to.c.Any other order to court deems necessary and fit to grant.d.Costs of suit ….”

9. What clearly emerges is that the suit is with respect to the estate of a dead person. It is about shielding the estate of the deceased from being disposed of by a bank, on account of a money-lending transaction that the deceased had with the bank. A person who handles the property of a dead person, is required, by section 45 of the Law of Succession Act, to have a grant of representation, and handling such property without such grant amounts to criminal conduct, called intermeddling, for which the person can be prosecuted. See Christine Kajuju Mwenda vs. Gervasio M’Rukunga [2006] eKLR (Lenaola, J), In re Estate of Damaris Njeri Kimani (Deceased) [2015] eKLR (Musyoka, J), Jane Wairimu Mathenge vs. Joseph Wachira Mathenge & 3 others [2016] eKLR (Ngaah, J and In re Estate of Francis Kimani Muchiri (Deceased) [2018] eKLR (Musyoka, J). Filing suit over estate assets, without a grant of representation, is said to amount to such intermeddling. See Kothari vs. Qureshi and another [1967] EA 564 (Rudd, J), John Kasyoki Kieti vs. Tabitha Nzivulu Kieti & Annah Ndileve Kieti (2001) eKLR (Mwera, J), Priyat Shah & another vs. Myendra Devchand Meghji Shah [2017] eKLR (N. Mwangi, J), In re Estate of Asman Nambwaya Shibwabo (Deceased) [2018] eKLR (J. Njagi, J), Jackim Onyango Misewe & another vs. Bernard Otieno Odhiambo & another [2019] eKLR (Aburili, J), In re Estate of Biruri Kihoria (Deceased) [2019] eKLR (Sewe, J), In re Estate of Oloo Omolo Lumasai (Deceased) [2020] eKLR (Musyoka, J) and Pravinchandra Jamnadas Kakad vs. Estate of Lucas Oluoch Mumia & 2 others [2022] eKLR (Mogeni, J). Secondly, section 79 of the said Act vests the assets of the dead person in the person appointed by a grant of representation as personal representative. After such vesting, the personal representative is then able to exercise the powers set out in section 82 of the Law of Succession Act, and comes under the duties set out in section 83 of the Law of Succession Act. The mere fact that a person is a spouse or child of another does not automatically make that person a legal or personal representative of the other. See Hawo Shanko vs. Mohamed Uta Shanko [2018] eKLR (Chitembwe, J), In re Estate of Francis Kimani Muchiri (Deceased) [2018] eKLR (Musyoka, J), In re Estate of Barasa Kanenje Manya (Deceased) [2020] eKLR (Musyoka, J) and Joseph Muriuki Kithinji vs. Peterson Ireri Mwaniki & 3 others [2021] eKLR (Kaniaru, J). Legal or personal representation can only be by way of a grant of representation, and without it any acts, by any person, on the property of another, would be illegal and criminal. See Gitau and 2 others vs. Wandai and 5 others [1989] KLR 23 (Tanui, J), Omari Kaburi vs. ICDC [2007] eKLR (W. Karanja, J), Joseph Oginga Onyoni & 2 others vs. Attorney General & 2 others [2016] eKLR (JM Mutungi, J) and In re Estate of Francis Kimani Muchiri (Deceased) [2018] eKLR (Musyoka, J). Part of the powers given to a legal or personal representative, under section 82, is that to sue or be sued on behalf of the estate. The exact words, used in section 82(a), are “… to enforce, by suit or otherwise, all causes of action which, by virtue of any law, survive the deceased or arise out of his death for his estate…”

10. For avoidance of doubt, sections 45 and 79 state as follows:45. No intermeddling with property of deceased person(1)Except so far as expressly authorized by this Act, or by any other written law, or by a grant of representation under this Act, no person shall, for any purpose, take possession or dispose of, or otherwise intermeddle with, any free property of a deceased person.

(2)Any person who contravenes the provisions of this section shall-(a)be guilty of an offence and liable to a fine not exceeding ten thousand shillings or to a term of imprisonment not exceeding one year or to both such fine and imprisonment; and(b)be answerable to the rightful executor or administrator, to the extent of the assets with which he has intermeddled after deducting any payments made in the due course of administration.”

79. Property of deceased to vest in personal representativeThe executor or administrator to whom representation has been granted shall be the personal representative of the deceased for all purposes of that grant, and, subject to any limitation imposed by the grant, all the property of the deceased shall vest in him as personal representative.”

11. In this particular case, the borrower died, and the lender sought to enforce the money-lending contract, by coming after the assets of the borrower. That prompted the respondent to move to court to secure the same, by way of injunction, and to also get the bank to renegotiate terms of repayment of the amounts on its money-lending contract with the deceased. From the wording of the plaint, there should be no doubt, that the suit was brought on behalf of the estate, and there ought to have been compliance with section 45 of the Law of Succession Act, by ensuring that the suit before the trial court was brought by a person who had first obtained representation to the estate of the deceased.

12. If I understand the respondent well, she appears to argue that she had informed the trial court that she was the administratrix of the estates of her late parents, and that was accepted by the court, and that, in any event, the duty lies with the appellant to prove that she had no such representation. The question then, that ought to be addressed, is whether the respondent was legally bound to demonstrate to the court that she had locus standi to mount the suit in the first place, or whether the burden was on the appellant to prove the contrary.

13. The respondent has cited Article 22 of the Constitution, to effect that every person has a right to institute court proceedings. With respect, that is a misapprehension of Article 22. Article 22 is about causes for enforcement of the Bill of Rights. It does not apply universally to all conceivable suits and causes that may be filed in court. The right to initiate a cause, for enforcement of the Bill of Rights, is provided for under Article 22(1). Article 22 has 4 Sub-Articles, and Article 22(1) should be read together with the rest. Article 22(2) is about who may initiate a cause under Article 22(1). Article 22(3) is about rules of procedure for filing of such causes, and Article 22(4) is about what should happen in the absence of the rules contemplated under Article 22(3). Rule 22(4) is now superfluous, for the Chief Justice did make rules under Article 22(3), being the Constitution of Kenya (Protection of Rights and Fundamental Freedoms) Practice and Procedure Rules, 2013, commonly known as the Mutunga Rules. They envisage filing of constitutional petitions, and how they are to be disposed of. The suit before the trial court was not what is envisaged under Article 22(1). It was not for enforcement of the Bill of Rights. It was not a constitutional petition. To that extent, Article 22(1) did not apply to it, to override sections 45, 79 and 82(1) of the Law of Succession Act.

14. Article 22 of the Constitution provides:22. Enforcement of Bill of Rights (1)Every person has the right to institute court proceedings claiming that a right or fundamental freedom in the Bill of Rights has been denied, violated or infringed, or is threatened.

(2)In addition to a person acting in their own interest, court proceedings under clause (1) may be instituted by—(a)a person acting on behalf of another person who cannot act in their own name;(b)a person acting as a member of, or in the interest of, a group or class of persons;(c)a person acting in the public interest; or(d)an association acting in the interest of one or more of its members.

(3)The Chief Justice shall make rules providing for the court proceedings referred to in this Article, which shall satisfy the criteria that—(a)the rights of standing provided for in clause (2) are fully facilitated;(b)formalities relating to the proceedings, including commencement of the proceedings, are kept to the minimum, and in particular that the court shall, if necessary, entertain proceedings on the basis of informal documentation;(c)no fee may be charged for commencing the proceedings;(d)the court, while observing the rules of natural justice, shall not be unreasonably restricted by procedural technicalities; and(e)an organisation or individual with particular expertise may, with the leave of the court, appear as a friend of the court.

(4)The absence of rules contemplated in clause (3) does not limit the right of any person to commence court proceedings under this Article, and to have the matter heard and determined by a court.”

15. Should the respondent have provided proof to the trial court that she was a legal or personal representative? Yes, she should have. The wording or language of the plaint, dated 7th August 2018, is that of a representative suit. The respondent did not bring the suit in her personal capacity. The land, that she sought to shield from foreclosure, did not belong to her, but to a dead person. She was not party to the money-lending contract, whose terms she wanted re-negotiated, it had been entered into between the appellant and a dead person. The orders she was seeking were on behalf of the dead. She was representing the dead person in the suit. The law says that she could not step into the shoes of the dead person, and assert his rights, or seek reliefs that he would have sought, were he alive, except where she had obtained authorization to do so, which authorization only came from a grant of representation. She had no authority to speak on behalf of a dead person, unless she got that authority. So, before the court could entertain her, she was duty-bound to prove that she had such authority. She was under a duty to demonstrate that she represented the deceased, which required her to produce the authorization for the representation. There was no duty on the part of the appellant to prove that there was no such authority, for that authority is personal to the person to whom it was been granted, and the duty is on that person to prove its existence. It was the respondent who asserted, in paragraph 3 of the plaint, that she was a “legal administrator.’’ It behooved her to prove that that was so, by placing before the court a grant of representation, duly issued by a competent court. She did not provide one, and her arguments point to such a grant not being in existence. Production of such a grant should be a condition precedent to such a person being heard, for locus standi goes to jurisdiction. The court has no jurisdiction to entertain a suit or cause, where a party is required to have obtained representation before filing suit, and the suit 7or cause is filed without such a grant. A suit or cause, initiated by a party who has no such grant, is incompetent from inception. Incompetence of a suit or cause goes to jurisdiction. A court has no jurisdiction to entertain an incompetent suit.

16. There is a wealth of case law on this, apart from Isaya Masira Momanyi vs. Daniel Omwoyo & another [2017] eKLR (JM Mutungi, J), cited by the appellant. See also Najeno vs. Serwanga [1974] EA 322 (Allen, Ag J), Otieno vs. Ougo & another (number 4) [1987] KLR 407 (Nyarangi, Platt & Gachuhi, JJA), Troustik Union International & another vs. Mrs. Jane Mbeyu & another [1993] eKLR (Apaloo CJ, Kwach, Cockar, Omolo & Tunoi, JJA), Mollo Edilio vs. Abdullahi H. Khalil & another [1994] eKLR (Gachuhi, Muli & Tunoi, JJA), Coast Bus Services Limited vs. Samuel Mbuvi Lai [1997] eKLR (Gicheru, Tunoi & Shah, JJA), Tabitha Waruguru Ng’ang’a vs. National Bank of Kenya [2004] eKLR (Azangalala, J), Peter Karanja Mwangi vs. Joseph Kamande & another [2009] eKLR (Sergon, J), Roy Parcels Services Limited vs. Esther W. Ngure [2010] eKLR (Okwengu, J), Christine Achieng Ogesa & another vs. British American Asset Managers Limited [2012] eKLR (GBM Kariuki, J), Jesse Karaya Gatimu vs. Mary Wanjiku Githinji [2014] eKLR (Ngaah, J), John Wairimu Mathenge (Petitioning on Behalf of the Estate of Adam Mathenge Wangombe) vs. Attorney General [2017] eKLR (Mativo, J), Salim Yusuf Mohamed & Another vs. Nabhan Swaleh Salim & 2 Others [2012] eKLR (F. Tuiyott, J), Tabitha Wangithi Muriuki vs. Wathiba Kimoo [2018] eKLR (Gitari, J), Judah Ndambuki Kituku vs. Leonard Mutuku Sesi & 2 others [2019] eKLR (Odunga, J) and Susan Njoki Kirigu vs. Ruth Nyongai Mukara & 4 others [2021] eKLR (Komingoi, J)), among others.

17. When the issue, that the respondent did not have the requisite capacity to sue, was raised, the trial court held that she was justified to sue, as she had brought the suit as legal representative of the deceased, she had told the court that she had initiated succession to the estate of her dead father, she was brought into the suit by being served with notifications, no preliminary objection was ever raised on the matter of the competence of the suit, she had her own legal rights to protect, and she had legitimate legal expectation to inherit the property. These conclusions had no legal foundation. No statutory provisions, nor caselaw, were cited, in the judgment, in justification. The correct legal position is what I have stated above.

18. As the respondent had no locus standi to bring the suit, there was no justification for the court to consider the application of the in duplum rule, and to make any of the other orders that it made. No injunction was available, for the person seeking it, did not have locus standi to ask for it, in the first place. An injunctive order is about restraining action, or stopping something being done, to property vested in the applicant. Where there is no such vesting, as was the case here, there would be no basis for granting the order. The other thing is that judgment was entered for the appellant, and against the respondent, on admission. The suit, the trial court was handling, had been brought by the respondent against the appellant. The respondent did not seek any orders against herself, and in favour of the appellant. No judgment could, therefore, be entered, upon her plaint, against her, other than dismissing the plaint or suit. Additionally, the appellant did not file a counterclaim to the plaint, upon which judgment could be pronounced in its favour, against the respondent. The subject-matter, of the judgment on admission, was not pleaded, nor prayed for, by either party. I agree with the appellant, the judgment on admission, as entered, was not available, for the trial court to enter against the respondent, and I find and hold that it was entered in error.

19. I believe I have said enough to demonstrate that the appeal herein is merited. I hereby allow it, with costs. Orders accordingly.

JUDGMENT DELIVERED, DATED AND SIGNED IN OPEN COURT AT BUSIA THIS 10TH DAY OF NOVEMBER 2023WM MUSYOKAJUDGE